Falling British Pound- Econ in Real Life
2024 ж. 8 Мам.
17 839 Рет қаралды
In this episode I talk about why the British pound depreciated this week, losing 5% of its value relative to the US dollar. I also talk about the new PMs supply-side fiscal policies. The big question is: will tax cuts lead to more growth or just more inflation? Time will tell....so be sure to subscribe and stay tuned for more econ videos. Thanks for watching.
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I am really enjoying these relevant and quick videos! Keep it up Mr Clifford
3:20 That's great! I'm pleased that literally whether I can continue to eat properly or to pay my bills is being determined by my being a guinea pig. 😂
Thank you for such a clear explanation!
These are very good videos. Great for Bell Work at the beginning of a class.
Best professor… can’t wait to see how this plays out for the British
We're fucked lmao.
@@wingsofthunder170 yep 🤣🤣.
@@wingsofthunder170 let's wish for the best
This is a great video and it's relevant after I take economics classes
thank you very much! you're incredible💖you help us sooo much... thank you💗🤍
Good video, thanks for the information!
Keep making these type of vids!
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Growing money is wisdom
Yes! More macro content. You know much I love macro :)
you are the best. thanks
I think there are a few things that are missing. We have a blank cheque subsidy on gas and electricity (the government is funding a price cap, this was popular and would decrease inflation for context gas in Europe is quadruple the price of the US and the UK relies on a lot of gas for electricity when the wind isn't blowing) however they projected this would cost £170bn over 2 years (incidentally, this is enough to put a solar panel on every house in the UK). we have extremely tight labour markets and constrained energy so I don't see how this policy would even work in the current environment since it's hard to fill current job vacancies and automated innovations will require energy. The government wants to increase immigration to loosen the labour markets but I find this reckless since we don't have the infrastructure to even support our current population (even talk of rolling blackouts) The problem we have is energy, the government is doing absolutely nothing to work on the supply or demand for energy and predictably failing to solve the problem.
I find interesting that slashing the budget is never in the talks. You'll hear them talking about changing interest rates, increasing or slowing down the money supply, lowering or raising taxes but they never talk about decreasing the actual size of the government. The reason why people say trickle down doesn't work is because you can't lower taxes and not lower the budget. Lower taxes does stimulate growth but you have to slash government spending which rarely happens.
There are other issues with it, but that's just political suicide. I think that they're cutting civil servants, but that's about it.
people typically want more government, not less; unfortunately... That's why i find it strange that Labour are latching onto "you're increasing borrowing" critique,,, it's like,,, what... do you want them to cut spending??? probably not since government spending had been labour's platform for decades.
@@sterlingweston No, they want them to increase or at least not to decrease taxes. 😂
@@billyfox6368 Increase taxes? Yes, that goes hand in hand with increasing government
@@sterlingweston Well, yes, but Labour aren't against that even if some people are.
The bigger risk here is not that the plan will fail and be reversed in the short term, but that it will hold and be seen to succeed in the medium term and do a lot of damage in the long. That is because the tax cuts are largely not going to lead to much productive growth but instead at speculation in the property market and financial sector. (Stamp duty, Investment zones, banker bonus limits, high rate of income tax), this is just the same sort of bad incentives that led to the GFC. All the talk of a post Brexit 'Singapore on the Thames' misses that Singapore collects over 50% of government revenue from state owned land leases and taxes, 90% of their land is state owned so it's an entirely differnty moidel, here we are just handing all the gains to landlords.
Can you explain why, given the fed raised their interest rates, the BoE had to follow?
We didn't. We just have similar economic conditions of stagflation so did a similar thing. We have a separate group, the Monetary Policy Commission, who decide it discretely.
great video i was thinking you should make a video of this
They should reduce government spending to be equal to the amount they get in taxes, not just cut taxes in hopes of getting more to spend. Simply put, if I have to be responsible with my money, the government should be responsible with our money we worked for.
Use Ecosia they are a search engine engine engine trees .
It was time to visit UK 🇬🇧 🙃 I'm 1 year late...!!!🤕
Wow, the UK doesn't know what it's doing. I don't think the textbook is wrong.
I understand that Keynes still dominates the College Board, but I hope your subscribers understand that this is not a "experiment;" it is a tried-&-true strategy to decrease inflation and increase growth. The las time this "experiment" was conducted was with Regan's tax cuts (and Thatcher's in GB several years before) when inflation was several points higher than it is today. Coupled with the extremely high interest rates from the Volker-run Fed, these tax cuts lead to a plummeting rate of inflation and the greatest 25-year economic expansion in history. You mention the "textbooks could be wrong," and if your textbook is dominated by the ghost of Keynes (which most are), it IS wrong. Inflation is always and everywhere a monetary phenomenon. So, if production can be incentivized through lower supply-side tax rates while the increase in the money supply decelerates (as is the case today in both GB and US) then expect inflation to plummet and growth to accelerate.
Ronald Reagan said it best, "The nine most terrifying words in the English language are, 'I'm from the government, and I'm here to help.'" Get government out of the way of private businesses.
Inflation is caused by one thing: The government messing with the money. They literally caused this mess and now they're fiddling with the economy to "fix it".
They're literally doing that you mug?
When Donald Trump did the same thing, inflation initially increased slightly, but over the longer term inflation fell well real GDP grew rapidly. Good on Liz Truss for her excellent new economic policyt.
Very disappointed with this video. Jacob said that cutting taxes will likely lead to more inflation based on what he calls "text book economics" is wrong. Governments are not safe depot boxes, they do not pull money out of circulation causing any reduction in the amount of cash in the economy to affecting inflation in an way. Governments redistribute resources and probably spends at a significantly higher rate than private companies. The only difference is that governments spends in significantly less productive ways than the private sector who is way more strategic in how they spend. The UK should do what every government should always be doing. Cutting spending and reducing taxes to near 10%. Less taxation will have little to no effect on inflation but will lead to an improved employment situation compared to the alternative. Pretending as if there is any debate between government or private spending leading to economic growth is comical. That's like saying that the government could spend my money to benefit me better than I could spend my own money to benefit my own life. I worked for my money, i'm the one with all the incentives to spend my money economically in a way that benefits me. Governments throw money at any cause that benefit them politically. The history of poor government spending practices is infinite, not to mention the billions lost to their theft, corruption, kickbacks, funding the MIC and big pharma. Also I like the left wing red meat, throwing shade at Reaganomics as voodoo economics. Reaganomics is not controversial at all. ALL companies want to increase profits, Hence ALL well run companies having the capital, will look to increase output either by funding upgrades or by expanding workforce(if they are in a competitive market, unprotected by government regulations). Reaganomics, did and will always lead to the creation of more jobs and economic growth, that's why the left had to attempt to assassinate Reagan and that's why another republican was elected after his 8 year run. And since we are on the topic, for your audience, What happens when you increase demand for labor while keeping the supply fixed(limiting immigration)? You get labor shortages, higher wages across the board for the average man as companies compete to attract labor, and a shrinking of the wealth inequality gap. Just like what happen under Trump. I'll stop now to avoid making this comment unreadable, but shame on you Jacob, I know you are a left wing guy always playing to that crowd but come on man!. Come on Mannn!!!
Keynesian economics has been proven a failure but it persists
@@firingallcylinders2949 ok, well thanks for adding to the public discourse. Very intelligent argument .
When you hire an economic historian for your exchequer and like read thatcherism in just 5 minutes, the dude will look at the past instead of being rational and genuine.
What’s the latest on this now we’re in 2024? 😊
This is just a reverse of Keynesian economics...
Say "thanks, USA, Ukraine and Russia"
Supply-side economics doesn’t work. It’s been shown that companies don’t expand with the tax cuts, they use the money for stock buybacks
Do you have a study to prove this?
We loose our Queen and so called allies are foundering..shame on you ..
you left out so much